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IMF: Eurozone Crisis at 'Critical Stage'

July 18, 2012 12:52 PM

VOA News

Leader of Greece's Panhellenic Socialist Movement party Evangelos Venizelos (L) and leader of the Democratic Left party Fotis Kouvelis leave the prime minister's office after a meeting in Athens, July 18, 2012.

The Washington-based lending agency said there are "severe downside risks" in the eurozone outlook, with regional and global implications. It said investors are favoring more financially stable northern countries in the eurozone, to the detriment of its debt-ridden countries to the south, such as Greece and Spain.

The IMF's conclusion was on display in Frankfurt, where investors for the first time paid to lend money to Germany. Berlin heads the eurozone's most robust economy and investors view German bonds as a safe haven for their money.

He said the country had no good economic choices, only a choice "between the bad and even worse."

In Greece, political leaders from the three parties leading the coalition government worked toward an agreement on how to impose $14 billion in austerity measures so Athens can collect the next installment of its international bailout.

Democratic Left party leader Fotis Kouvelis said reforms promised to the country's international creditors would be carried out.

"We agreed that structural reforms must take place without delay, structural reforms that will serve the good of the state and to make the best use of state wealth," said Kouvelis.